Thursday, July 31, 2008

Marketing in an Economic Downturn

CHICAGO--(BUSINESS WIRE)--According to a recent American Marketing Association (AMA) www.marketingpower.com survey, 60 percent of AMA member marketers believe that halting or reducing spending on key marketing programs is the biggest mistake marketers can make in an economic downturn. Marketers also report that focusing on short-term tactics and sticking to the status quo are some additional missteps marketers make.

“Our survey reinforces that these are challenging times to be a marketer,” said Nancy Costopulos, Chief Marketing Officer of the American Marketing Association. “Management is pressing for greater accountability from the marketing function, and the industry must rise to the challenge.”

Many marketers surveyed feel their greatest internal challenge is demonstrating the value of marketing when sales are decreasing. Other top internal issues include realigning marketing strategies to match business objectives and focusing on longer-term brand strategies.

To help the marketing community manage these mistakes and challenges, American Marketing Association offers the following four strategies to enhance marketing plans in a downturn: shape the message, don’t slash the price; focus on who NOT to target; stand apart from the crowd and invest in innovation; and sustain the brand.

1. Shape the Message, Don’t Slash the Price

“Focus on the company’s value to the market” – Anonymous survey respondent.

Survey Fact

Only 3 percent of American Marketing Association marketers believe that it is important for marketing functions to adjust pricing strategy to help sustain and grow business during an economic downturn.

Implications for Marketers

  • Conduct research to understand your competitor’s positioning and your target audiences’ perception of the economic environment.
  • Hone and refine your messages.
  • Highlight the value of your product or service, rather than slashing the price.

2. Focus on Who NOT to Target

“Fish where [your] fish are” – Anonymous survey respondent.

Survey Fact

Sixty-seven percent of AMA marketers feel it is important to mitigate the impact of an economic downturn by refining target audiences.

Implications for Marketers

  • Assess which segments of potential customers you do NOT want to target.
  • Demarket to inappropriate market segments. Simply stated, some customers are more costly to serve than to lose.
  • Focus marketing strategies on customer segments that will produce the greatest ROI.

3. Stand Apart from the Crowd and Invest in Innovation

“Major opportunities when others are cutting back” – Anonymous survey respondent.

Survey Fact

A majority of AMA marketers, 66 percent, report that they would take the same amount or less risk with a new product and/or service innovation during a time of economic uncertainty.

Implications for Marketers

  • Differentiate through innovation with a product or service that performs in a faltering economy.
  • Invest in R&D now to ensure your company is in a position to compete when the economy rebounds.

4. Sustain the Brand

“Sometimes it is the reeducation of a product [that can help sustain or grow a brand]” – Anonymous survey respondent.

Survey Fact

Sixty-three percent of marketers believe that they can lessen the impact of a downturn by investing in brand building, as part of their marketing plan.

Implications for Marketers

  • Establish access to executive officers to understand ongoing shifts in business strategy.
  • Realign marketing strategies to match business objectives quickly to demonstrate a commitment to the bottom line.
  • Qualify and quantify results quarterly to establish an ongoing dialogue with executive officers.

“The key to success for marketers in this economy will be supporting the short term, and managing for the long term,” said Costopulos. “It is more important than ever that marketers simultaneously run a sprint and a marathon.”

Survey Methodology:

From May 6, 2008 through May 16, 2008, the American Marketing Association conducted online interviews with 244 AMA members in the continental United States. The sampling error associated with a sample size of 244 respondents is plus/minus six to seven percentage points at a 95 percent confidence level.

For an executive summary of the data, please contact Christine Heath at christine.heath@fleishman.com.

About the American Marketing Association

The American Marketing Association is the largest marketing association in North America. It is a professional association for individuals and organizations involved in the practice, teaching and study of marketing worldwide. It is also the source that marketers turn to every day to deepen their marketing expertise, elevate their careers, and, ultimately, achieve better results. American Marketing Association members are connected to a network of experienced marketers nearly 40,000 strong.

American Marketing Association offers highly acclaimed Training Series, professional conferences and Hot Topic events focused on the immediate needs of marketers, as well as trends shaping the future. American Marketing Association’s website, MarketingPower.com, is the everyday connection to marketing data, articles, case studies, best practices and a robust job bank. Additionally, the American Marketing Association is the source for the field’s top magazines and journals, including Marketing News. Through local and collegiate chapters, American Marketing Association members are connected with the best people and the best practices.

American Marketing Association is also the creator of Mplanet, the unparalleled industry event that brings together the world’s most creative thinkers, including senior marketing executives, top academicians and other thought leaders, to share fresh insights, new concepts, the latest research and solutions for the most pressing marketing challenges and opportunities. Mplanet 2009 will take place in Orlando, Florida, January 26-28, 2009.

For more information on the American Marketing Association or Mplanet 2009, please visit www.MarketingPower.com

Thursday, July 24, 2008

Idea of the Day

If you already know what I'm talking about, then you're probably mumbling and rolling your eyes as you think about that boss or manager who had serial entrepreneurial tendencies. The rest of you are thinking, "what is he talking about." Let me start off by saying that entrepreneurs truly are some of the most influential people in today's society. Fortunately we live in a society that rewards free thinking and creativity. However, in the business world - especially the small business world - the prevalence of the "Idea-a-day" mentality can be seriously hurtful to a business's longevity.

As an example, think of the stock market. Sound investments are typically well thought out and formulated for consistent long-term growth. The majority of day traders who are trying to buy and sell and make the quick and easy buck typically - although a few beat the market - grind their savings into sawdust.

The same goes for business strategy. You have to plan the work and work the plan as the old adage goes. Ironically, you would be surprised how many leaders get caught up doing just the opposite. People tend to get an idea and become excited and want to get it in place as soon as possible but typically observe the opposite.

My suggestion: Team accountability. Get together as a team and spend time to formulate a long term plan. Where is your business now, and where do you see it in five years? Write down the goals and vision of your business. Then work on a shorter term, 90 day plan to orchestrate your sales and marketing strategy. Take time to really plan things out. Often times I see excitement rush a project from conception to launch in just a few days and as a result it typically falls apart after a few weeks.

My step-by-step prescription for success:

  1. Set your organization's goals. Make sure they're on paper. Ideally, you should have them hanging in every office. Open goals lead to more accountability. Where will your company be in 5 years?
  2. Create a 90 day plan. This is where you formulate strategy. How are you going to grow the business? This is where you fill the proverbial tool box with the necessary items to be successful.
  3. Stick to the plan. Work the plan. It's OK to have ideas, but develop them slowly and launch them accordingly. I can't tell you how many times Managing Directors and other executives have come to me with the next huge idea that they can't wait to start. Nine times out of ten they are a waste of time (the other one idea is the reason why they are managing directors).
  4. Measure performance and make changes as needed. Monthly is ideal.

Do the research, plan your "investment" and attain consistent growth. The days of the day traders are few and far between.

Sunday, July 13, 2008

Yahoo Rejects Microsoft/Icahn Proposal

Saturday July 12, 11:08 pm ET


Yahoo! Suggests Microsoft Make A Proposal To Acquire Whole Company SUNNYVALE, Calif.--(BUSINESS WIRE)--Yahoo! Inc. (Nasdaq:YHOO - News), a leading global Internet company, confirmed today that it has rejected a joint proposal from Microsoft Corporation and Carl Icahn for a complex restructuring of Yahoo! that would include the acquisition of Yahoo!'s search business by Microsoft.

The proposal was made on Friday evening and Yahoo! was given less than 24 hours to accept the proposal, the fundamental terms of which Microsoft and Mr. Icahn made clear they were unwilling to negotiate. After reviewing the proposal with its legal and financial advisers, Yahoo!'s Board of Directors determined that accepting the proposal is not in the best interests of its stockholders.

The Boards rejection of the proposal was based on a number of factors, including the following:

1. Yahoo!s existing business plus its recently signed commercial agreement with Google has superior financial value and less complexity and risk than the Microsoft/Icahn proposal.

2. The Microsoft/Icahn proposal would preclude a potential sale of all of Yahoo! for a full and fair price, including a control premium.

3. The major component of the overall value per share asserted by Microsoft/Icahn would be in Yahoo!s remaining non-search businesses which would be overseen by Mr. Icahns slate of directors, which has virtually no working knowledge of Yahoo!s businesses.

4. The Microsoft/Icahn proposal would require the immediate replacement of the current Board and removal of the top management team at Yahoo!. The Yahoo! Board believes these moves would destabilize Yahoo! for the up to the one year it would take to gain regulatory approval for this deal.

Roy Bostock, Chairman of Yahoo! said, This odd and opportunistic alliance of Microsoft and Carl Icahn has anything but the interests of Yahoo!'s stockholders in mind. Clearly, Microsoft, having failed to advance in search, is aligning with the short-term objectives of Mr. Icahn to coerce Yahoo! into selling its core strategic search assets on terms that are highly advantageous to Microsoft, but disadvantageous to Yahoo! stockholders. Yahoos Board of Directors will not allow that to happen. Yahoo!s Board remains open to any transaction that delivers full value to our stockholders we just do not believe such a transaction should be dictated by Microsoft and a single short-term investor.

Mr. Bostock continued, After negotiating among themselves without the involvement of Yahoo!, Carl Icahn and Microsoft presented us with a take it or leave it proposal under which we would be required to restructure the Company, hand over to Microsoft Yahoo!s valuable search business and to Carl Icahn the rest of the Company, giving us less than 24 hours to respond. It is ludicrous to think that our Board could accept such a proposal. While this type of erratic and unpredictable behavior is consistent with what we have come to expect from Microsoft, we will not be bludgeoned into a transaction that is not in the best interests of our stockholders.

Mr. Bostock also noted that Microsofts position that it would not deal with, or otherwise engage with, Yahoo!s management to reach agreement on this proposal or to implement it, is completely absurd and irresponsible given the complexity of the deal one that requires the removal of half of Yahoo!s business from Yahoo! and then the integration of it into Microsoft.

Yahoo!'s Board points out that a transaction to acquire the whole company would be much more straightforward and involve far less risk than the new proposal or any similar alternative. The Board believes a whole company transaction could be negotiated and executed prior to August 1st. In rejecting the Microsoft/Icahn proposal, Yahoo! not only repeated its offer to sell the entire Company to Microsoft for at least $33 per share, but also offered to negotiate an improved search only transaction. Microsoft rejected both offers.

Ironically, Carl Icahn, who jointly with Microsoft developed and presented this proposal, had previously urged Yahoo! not to sell its search business to Microsoft. Specifically, in an interview on CNBC's Fast Money program, on June 4, 2008, Mr. Icahn said, ... it's crazy for this company now to do this alternative deal and give the store away, because obviously, an alternative deal is a poison pill because once you've done an alternative deal and given the search to Microsoft, you don't need Microsoft to buy you anymore. So, that would be a poison pill.

Significantly, the Board believes Microsoft and Mr. Icahn are overstating the value their search and restructuring proposal would deliver to Yahoo! stockholders and are substantially understating the risks. Yahoo! noted that a transaction that would separate the Company's search and display businesses is an undertaking of great complexity. While the Board acknowledges that the current proposal contains a number of improvements over Microsofts earlier proposal, the Yahoo! Board's conclusion that the current proposal is not in the best interests of stockholders is based on a number of factors, including:

  • The revenue guarantees suggested, which are conditional and subject to reduction, are well below the search revenue that the Company is expected to generate on its own and in association with its announced commercial agreement with Google. That agreement alone is estimated to generate $250 to $450 million of incremental cash flow for the first twelve months following implementation, while allowing Yahoo! to remain a principal in paid search;
  • The success of the remaining Company is critically dependent on Microsofts ability to effectively monetize search;
  • Microsoft/Icahns proposed Traffic Acquisition Costs rates are below market;
  • The proposal calls for Yahoo! to sell its industry-leading algorithmic search business and its related strategic and valuable intellectual property portfolio for no incremental consideration; and
  • Many of the components of the headline value that Mr. Icahn and Microsoft put forward, such as the spin-off of the Yahoo!'s Asian assets and the return of cash to stockholders, are steps that could be taken by Yahoo! on its own and the Board continues to evaluate these options.

Mr. Bostock concluded, Microsoft and Mr. Icahn are trying to dismantle the Company and deliver our search business to Microsoft on terms that would be disadvantageous to Yahoo! stockholders. We are prepared to let our stockholders, not Microsoft and Carl Icahn, decide what is in their best interests and we look forward to the upcoming vote.

About Yahoo! Inc.

Yahoo! Inc. is a leading global Internet brand and one of the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its communities of users, advertisers, publishers, and developers by creating indispensable experiences built on trust. Yahoo! is headquartered in Sunnyvale, California.

Non-GAAP Financial Measures

This release refers to operating cash flow (operating income before depreciation, amortization of intangible assets, and stock-based compensation expense, or OCF), which is a non-GAAP financial measure. The most comparable GAAP measure is income from operations. With respect to the OCF numbers provided in this release, the estimate of income from operations is the same as the estimated OCF, as the Company does not expect to incur any additional depreciation and amortization or stock-based compensation expense related to this agreement.

Forward Looking Statements

This release (including without limitation the statements and information in the quotations in this press release) contains forward-looking statements that involve risks and uncertainties concerning Yahoo!'s projected financial performance as well as Yahoo!'s strategic and operational plans. Actual results may differ materially from those described in this release due to a number of risks and uncertainties. The potential risks and uncertainties include, among others, the expected benefits of the commercial agreement with Google may not be realized, including as a result of actions taken by United States or foreign regulatory authorities and the response or acceptance of the agreement by publishers, advertisers, users, and employees; the implementation and results of Yahoo!'s ongoing strategic initiatives; the impact of organizational changes; Yahoo!'s ability to compete with new or existing competitors; reduction in spending by, or loss of, marketing services customers; the demand by customers for Yahoo!'s premium services; acceptance by users of new products and services; risks related to joint ventures and the integration of acquisitions; risks related to Yahoo!'s international operations; failure to manage growth and diversification; adverse results in litigation, including intellectual property infringement claims; Yahoo!'s ability to protect its intellectual property and the value of its brands; dependence on key personnel; dependence on third parties for technology, services, content, and distribution; general economic conditions and changes in economic conditions; potential continuing uncertainty arising in connection with the withdrawal of Microsoft's unsolicited proposal to acquire Yahoo! and the announced intention by a stockholder to seek control of our Board of Directors; the possibility that Microsoft or another person may in the future make another proposal, or take other actions which may create uncertainty for our employees, publishers, advertisers, and other business partners; and the possibility of significant costs of defense, indemnification, and liability resulting from stockholder litigation relating to the Microsoft proposal. More information about potential factors that could affect Yahoo!'s business and financial results is included under the captions "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in Yahoo!'s Annual Report on Form 10-K for the fiscal year ended December 31, 2007, as amended, and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2008, which are on file with the Securities and Exchange Commission ("SEC") and available at the SEC's website at www.sec.gov. All information in this release is as of July 12, 2008, unless otherwise noted, and Yahoo! does not intend, and undertakes no duty, to update or otherwise revise the information contained in this release.

Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo! Inc. All other names are trademarks and/or registered trademarks of their respective owners.


Contact:
Yahoo! Inc.
Brad Williams, 408-349-7069 (Media)
bhw@yahoo-inc.com
Marta Nichols, 408-349-3527 (Investors)
mnichols@yahoo-inc.com
or
The Abernathy MacGregor Group for Yahoo! Inc.
Adam Miller, 212-371-5999 (Media)
alm@abmac.com
Winnie Lerner, 212-371-5999 (Media)
wal@abmac.com

Source: Yahoo! Inc.

Monday, July 7, 2008

I'm a Punk Rocker, Yes I am

I wanted to post this up a while back and forgot. For two reasons. One, Iggy Pop is in this song, and that's reason enough. Also though, this song is super catchy, and you will all walk around humming this at work and think "Damnit Grant!"

Oil Drops on Profit-Taking, Easing Iran Tensions

Reuters
Monday July 7, 3:23 pm ET

NEW YORK (Reuters) - Oil dropped over $4 a barrel Monday on profit taking and signals that Iran will be more flexible in negotiations over its nuclear program.

Oil received additional pressure from news Hurricane Bertha will likely avoid damaging Gulf of Mexico energy facilities.U.S. crude settled at $141.37 a barrel, down $3.92 and below Friday's low of $143.22. Brent crude settled at $141.87 a barrel, down $2.55. The New York Mercantile Exchange did not issue an official Friday closing price due to the July 4 holiday.

"Crude prices are down on profit-taking as the fears that brought prices up before the July Fourth holiday didn't materialize -- there was no attack on Iran and the storm Bertha does not appear to be a threat to oil production," said Phil Flynn, an analyst with Alaron Trading in Chicago.

Oil hit a record $145.85 on Thursday, but later eased as traders anticipated lessening tensions between Iran and the West after Tehran responded to a package of incentives to try to resolve the dispute.

Tehran's foreign minister Sunday expressed optimism about what he said was a "new environment" for talks.

"Iran shows signs of improved lines of communication," said Barclays Capital in a report.

But Iranian President Mahmoud Ahmadinejad said Monday Iran would not abandon its right to enrich uranium and rejected a major powers' demand to do so as "illegitimate," the official IRNA news agency reported.

Earlier Monday, oil prices were pressured by a gain in the dollar, which reached a one-week high against a basket of major currencies, benefiting from a European Central Bank tone that has reduced expectations of further interest rate rises.

Strength in the U.S. dollar can reduce the appeal of oil and other commodities to investors as a hedge against inflation.

Oil has gained over 40 percent this year, driven partly by tension over Iran's nuclear program and expectations that global supply will fail to keep pace with demand from fast growing Asian economies such as China.

The rally has led to fuel protests worldwide and begun to dampen demand in some consumer nations, including the United States, the world's biggest energy user. World leaders are concerned prices could move even higher.

Leaders of the Group of Eight nations gathering for a summit in Japan fear further rises, Italian Prime Minister Silvio Berlusconi said.

"There are fears oil prices could increase further. Some people fear they could reach $200," Berlusconi told reporters on the sidelines of the summit.

(Reporting by Rebekah Kebede and Gene Ramos in New York, Alex Lawler in London and Fayen Wong in Perth; Editing by Marguerita Choy)